~ An Aussie look at Financial markets-Been in the Biz for over 30 years!

Thursday 13th April – Australian Market Rap

ASX drops 44 points to 5890 on a big fall in miners, energy and Telstra again. Gold the only highlight. Asian markets mixed with Japan slipping again on a higher yen down 1.11% and China up 0.16%. AUD stronger after jobs numbers at 75.83c. US Futures down 1 point.

Happy Easter. Back Tuesday, in the meantime the ASX 200 has risen 29 points for the week and BHP is down a mere 28 cents. Puts the moves into perspective. The Big Bank Basket has been the big winner this week rising from $182.90 to $186.00 (+1.6%)

Banks and financials finally came off the top but good underlying support continues. The Big Bank Basket finished the week at $186.00. Insurers sold off again with QBE Insurance (QBE) -1.79% and Suncorp (SUN) +0.37%. NZ is facing its worse storm in 50 years this weekend so claims will be up and follows Debbie hits Queensland.

Industrials mixed as some defensives rose in the gaming sector, Aristocrat (ALL) +1.36%, TattsGroup (TTS) -0.23% and CrownResorts (CWN) +0.83%. Losers included Boral (BLD) -1.86%, CSR -2.16%, Orica (ORI) -1.44% and JamesHardie (JHX) -1.84%. DownerEDI (DOW) -3.74% lived up to its name following media reports and company reports from the Spotless Group (SPO) +1.84% that there may be another buyer sniffing around.

IT and Telcos again a bad place to be. Telstra (TLS) -1.42% continued its decline as brokers stared the inevitable downgrade cycle., Vocus Group (VOC) -4.75% as the slide continues. TPG Telecom (TPM) still in a trading halt. Couple of big winners in the IT sector with Touchcorp (TCH) +9.85% and Afterpay (AFY) +12.33% both doing well as another party has entered the merger discussions and has approached Touchpay with a different offer.

Speculative stock of the day: Reproductive Health Science (RHS) +260.00% announced results from the University of Ghent have confirmed that DoPlify is ‘world leading’. More to come from the company and its cancer treatments at the AGM scheduled for 26th

CORPORATE NEWS

Transurban (TCL) +0.08% announced Average Traffic Growth (AVT) grew 5.3% driven by growth in Brisbane and the US. Toll revenue increased by 11.3% to $502m.

Fortescue Metals (FMG) -6.78% shipped 39.6m tonnes of iron ore in the three months to March 31, down 6% from the 42m tonnes a year earlier, and also down 6% decline on the second-quarter. Cash costs, at $US13.06 per wet metric tonne, were down 12% from a year earlier but rose 4% from the second quarter.

Bellamy’s Australia (BAL) +0.90% has confirmed acting chief executive Andrew Cohen as the permanent head of the company. The company also appointed John Ho as a non-executive director. Ho is the founder and chief investment officer of Hong Kong-based investor Janchor Partners, which has a stake of 7.01% in Bellamy’s.

Whitehaven (WHC) -6.88% said it produced 5.7m tonnes of coal for the quarter, a decrease of 11% from the previous quarter, and affirmed its full-year production guidance of 21 to 22m tonnes.

Yancoal (YAL) -unchanged has been given the green light by the FIRB for the takeover of Rio Tinto’s Australian coal assets in a US$2.5bn deal. Yancoal Australiais 78% owned by Yanzhou Coal Mining of Hong Kong, which is in turn controlled by the Chinese government.

Myer (MYR) -0.83% has rescued both Marcs and DavidLawrence after buying both brands from the administrator. The acquisition includes Marcs and David Lawrence’s existing inventory, brand names and intellectual property but does not include lease liabilities and staff obligations.

CIMIC (CIM) +0.05% quarterly profit has jumped 23%. CIMIC made a net profit of $160.3m in the three months to March, up from $130.3m a year earlier. It has reaffirmed its guidance of an annual profit of between $640m and $700m in 2017.

BOND CORNER

ECONOMIC NEWS

A quick economic snapshot from the ABS

The RBA has become more concerned about the surge in household debt and a rise in interest only loans that is making the financial system vulnerable to a correction in property prices or rising interest rates. The RBA issued its strongest warning yet that rampant debt fuelled property speculation would amplify financial shocks and inflict pain on the entire economy.

Jobs number today with 60,900 jobs added in March 74,500 of which were full time jobs. Participation rate was higher at 64.8%, leaving the headline rate at 5.9%.

ASIAN NEWS

China’s crude imports in March surged to a record, and topped the U.S. as the world’s biggest overseas buyer during the first quarter.

EUROPE AND US

Seems there is more to the phrase ‘the buck stops here’ as Trump has ‘ordered’ the dollar down. A conflict of interest though, given the dollar reflects his popularity he believes. Good to see the equity market and the currency market now the equivalent to a TV ratings number.

Then I remember Jesus got crucified, so his decision making skills obviously weren’t brilliant.

Jesus was hanging from the cross and he called out to Peter.

“Peter, I need to see you.”

Peter tried to get to the cross but the Roman soldiers fought him back.

Jesus again said, “Peter, please come here. I want to tell you something.”

Again Peter tries to fight his way through the guards but once again they stop him.

One more time, Jesus says, “Peter, please, I need to tell you something.

This time, Peter musters up all of his strength, manages to get past the guards, goes up to the cross and says, “Yes my Lord, what do you want to tell me.”

Jesus replies, “I can see your house from up here.”

Jesus is playing a round of golf with Moses in Heaven and they come upon a water trap.

Jesus turns to Moses and asks, “Didn’t you do something with water once?” and Moses says yeah, and proceeds to do the trick where he parts the waters.

Jesus is impressed, and Moses in turn asks, “Didn’t you also do something with water?”

Jesus says, “Yeah watch this” and proceeds to step out onto the water, but he sinks almost immediately to his knees. He gets out, gets a running start, and tries again, this time sinking to his waist. He comes out confused and embarrassed and Moses asks, “What was it you were trying to do?”

“I used to be able to walk on water,” Jesus replies.

“The last time you tried it,” Moses asks, “Did you have those holes in your feet?”